Pharrell Made Only $2,700 In Songwriter Royalties From 43 Million Plays Of 'Happy' On Pandora

Pharrell is sad about his royalties. Matt Sayles/AP This past year was great for singer Pharrell Williams. His song "Happy" secured him Grammy nominations for Best Music Video and Best Pop Solo Performance.

Despite Pharrell's ubiquity, "Happy" made $2,700 in publisher and songwriter royalties from 43 million Pandora streams in the first quarter of 2014, according to an email from music publisher Sony/ATV CEO Marty Bandier obtained by Digital Music News.

In the letter, Bandier said a million streams of a song on Pandora yields roughly just $60 in royalties. "This is a totally unacceptable situation and one that cannot be allowed to continue," Bandier wrote.

"According to industry analyst Michael DeGusta, Pharrell would likely have earned approximately $25,000 from the 43 million plays," Wile says.

Bandier added: "We at Sony/ATV want these digital music services to be successful because they are a great way for music fans to listen to music and have the potential to generate significant new revenues for everyone. However, this success should not come at the expense of songwriters whose songs are essential for these services to exist and thrive."

Given how little he's making, it comes as no surprise that Pharrell is among a group of artists demanding that YouTube take down thousands of songs it doesn't have permission to share. If YouTube doesn't remove the 20,000 songs, a legal group called Global Music Rights — which represents artists including Pharrell, the Eagles, John Lennon, and Smokey Robinson — says it will bring a $1 billion lawsuit against Google, YouTube's parent company.

Pandora's Director of Public Affairs Dave Grimaldi provided this statement to Business Insider:

We respect Mr. Bandier's right to advocate on behalf of his business which, if BMI's recent results are any indication, is likely experiencing record revenues.

However, we wish Mr. Bandier would provide the proper context and facts. Pandora is already the highest paying form of radio to both performers and songwriters. We have paid more than $1 billion to rights holders since our inception, which amounts to over half of all revenue we have generated. Regarding the specific songs he mentions in his letter, Pandora paid all rights holders more than $150,000 in just three months, substantially more than the $6,100 he suggests.

The issue is not whether Pandora pays enough in royalties. The real issue is the financial dispute between labels and publishers about how to divide Pandora's industry-leading royalties. Mr. Bandier and his label peers (many of whom work within the same companies) are free to decide amongst themselves to change the split between songwriters and performing artists of the substantial royalty revenue already paid by Pandora. We'd also encourage that same group to provide transparency about how those dollars flow to the artists and songwriters.

We want to work constructively with Sony ATV and other publishers to create positive, sustainable growth for the music industry. However, that vision must go beyond simply demanding that Pandora, which is already the highest paying form of radio, always pay more.